New era financial institution NG.Money raises $10 million with a16z and Monashees
Fintech has 900,000 teenagers aged between 12 and 17 as clients in one year of operation
Generation Z is gaining the attention of the financial market. Engaged in socio-environmental, critical and short-sighted causes, the so-called “digital natives” exceed 50 million in Brazil and have already started to have a financial life. It is this audience that fintech NG.Cash is targeting, a “teen banking” that has just raised $10 million with Andreessen Horowitz (a16z) and Monashees. It is one of the biggest seed rounds in the country.
“We want to give access to electronic money to a generation that wants autonomy and whose vast majority do not yet have a bank account”, says Mario Augusto Sá, founder and CEO of NG.Cash. “Our great differential is knowing how to communicate with this audience and understand their needs. At Nubank and Banco Inter, it is still the father who opens an account to pay his son’s allowance. We strongly believe in our client’s independence”. Fintech targets consumers aged 12 to 17.
Founders of unicorns such as Brex, Rappi, Movile and Wildlife, in addition to partners from Eleva and Trybe, also participate in the round, alongside celebrities such as the influential duo Los Grandes and former volleyball coach Bernardinho. 17Sigma, venture capital manager of Pierpaolo Barbieri, founder of the Argentine unicorn Ualá, and Norte Ventures also joined.
Outside, the thesis seems proven. “Teen banking” fintechs such as Greenlight, Step and Current have already achieved billionaire valuations with major investors and partners (it is still too early to know if they will get through the crisis well). JP Morgan even partnered with Greenlight to offer financial solutions to teenagers. A16z, who now bets on NG.Cash, is also on the cap table of two of these three unicorns. A little smaller, but exploiting the same audience, Copper Banking already has a million users.
NG.Cash — the name comes from “new generation” — is not far behind. In operation for about a year, the startup from Rio de Janeiro already has 900,000 young customers in its portfolio. A good part of this audience is formed by gamers, who find on the platform an electronics marketplace with special discounts, credit card without annual fee and digital account.
The business was born from two other experiences of the founder, who is only 24 years old, as an entrepreneur. While still in high school, Sá founded with classmates Victor Trindade (Eagle) and Gabriel Soares (Neox) a YouTube channel aimed at the gamer audience, which today has more than 8 million subscribers. To organize profits from the project and expand business possibilities, the three created Fanstar, an influencer representation agency in which the CEO of NG.Cash is still a partner.
But the big deal came from the faculty of computer engineering at PUC-Rio. In partnership with Professor Luis Felipe Carvalho, the young entrepreneur founded Trampolin, an as-a-service banking platform that was eventually acquired by Stone. A while later, the professor would join the team of founding partners at NG.Cash with Sá, alongside the two influencers, Eagle and Neox, and Petrus Arruda and Antônio Nakad, two other colleagues from PUC.
Stone, by the way, played a key role in the beginning of NG.Cash. In early 2021, he signed a pre-seed check for $400,000. It was with this capital that the company ran until now. “We were never worried about growing at any cost. Our ‘burn rate’ is low, our customer acquisition cost is less than R$ 5. I think this was important to capture in this scenario”, evaluates the entrepreneur. “Up until now, we have created our user base organically, without spending on marketing, and we intend to continue creating content.”
Fintech tests a revenue diversification pilot with advertising and partnerships. In a contract with Amazon Prime, it already exploits synergies by offering discounts to its customers when subscribing to the service, while taking a percentage of the monthly fees for its own cashier. In another business, with Rappi, it has been testing the triggering of pushes with promotions. Also for this reason, a good part of the check will be invested in contracting for product development. The team of 45 people should soon double.
Source: Value Pipeline